It is very important for everybody around the world to know what their credit score is, this is so they will know what they need to do to improve it if they need to.
The fact is that every single time you apply for a credit card, a home loan, or even car loans, personal loans or student loans for that matter, lender will look into your credit history, so they can find out you risk level. To know if you are a risk and if you will be pay on time every month lenders will look at your credit score.
It is safe to say that your credit score plays a big part of in what credit you get from financial services providers. Your credit score will also influence what you monthly payments will be, so if you have a low credit score, it is said that you can pay up to 4 times more interest than people who have a higher credit score.
This is why understanding your credit score report makes a lot of sense, it will enable you to manage and maintain the health of your credit. Also, by knowing exactly how you rick, in terms of credit, is evaluated you will be able to take the necessary steps to lower and maintain a lower credit risk factor.
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Posted in Credit.
Is your low interest credit card really low interest? Following is a list of the four most common methods of calculation regarding how finance charges are figured:
Calculation Methods
Average daily balance – The credit card company averages your daily balance. For example, if you charged a purchase of $200 on the 1st day of July and $300 on the 17th, your average daily balance would be $250. That number multiplied by approximately one-twelfth of your annual percentage rate (APR) equals your monthly finance charge. The company may calculate your interest on either a daily or monthly basis.
Daily balance - The credit card company takes the actual balance you carry each day of your billing cycle and multiplies it by approximately 1/365th of your APR and then adds it together.
Two Cycle Balance – This method of calculation is similar to an average daily balance except the daily average is based on your last two billing cycles, not just one. If you do not pay off your credit card in full one month, you will be hit with retroactive interest on your next bill.
Previous Balance – The beginning and ending balance of your statement are shown. The finance charge is based on the outstanding balance when the billing cycle begins.
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Posted in Credit.
As the calendars rolled from the 20th to the 21st century the surety bond industry as a whole experienced some large scale changes. It was after several years of record breaking losses that forced many bonding companies to close down operations. Those sureties that were able to survive the soft market of the early millennium had some major changes to make. After a thorough review of their underwriting guidelines the industry shifted to become a much more conservative, leaving many applicants without the good credit unable to be bonded.
The fact of the matter is that many Americans do not have perfect credit, or anywhere near for that matter. One study (http://www.nationalscoreindex.com/ScoreNews_Archive_03.aspx) by Experian shows that the credit of an average American is 683. With a bond market that generally looks for a credit score of 650 or better, a large amount of the market was considered “un-bondable”. Typically those with sub-par credit score would have to get an Irrevocable Letter of Credit from the bank, or obtain a bond by posting 100% collateral.
After a short a period of time where this was the norm, Bad Credit Surety Bond Programs started to emerge. These programs were an alternative for those with bad credit that went against traditional suretyship. In these programs the surety would write for high risk commercial (sorry, this programs do not apply to contract bonds), but at much higher rates then typical bonds. Though this solution may have seamed very obvious to many, it should be noted that traditional surety underwriting is done with a 0% loss ratio. What this means is that unlike insurance, which many people mistake surety bonds for, there is no loss built into the premium of the bonds, hence only the best applicants traditionally are accepted.
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Posted in Credit.